Exhibit
      10.2

    


    FARM-
      OUT
      ASSIGNMENT

    


    THIS
      FARM-OUT ASSIGNMENT made and entered into this the 4th day of October, 2007,
      by
      and between K & D ENERGY, a Kentucky Partnership, by Partners, Danny
      Thomasson, of P. O. Box 360, Bremen, Kentucky 42325, and Keith Conn, 85 Tyson
      Lane, Dunmore, Kentucky 42339, being all partners in the partnership,
      hereinafter ASSIGNOR and KY USA ENERGY, INC., C/O Steve Eversole, 321 Somerset
      Road, London, Kentucky 40741, hereinafter ASSIGNEE;

     

    WITNESSETH:
      Whereas, ASSIGNOR owns certain oil and gas leases in West Central, Kentucky,
      more specifically described hereinafter and desire to do this Farm-Out
      Assignment to ASSIGNEE to form a core basis for a publicly traded company so
      that money can be raised to fully develop the project from which ASSIGNOR will
      receive a carried working interest and by their signatures below the parties
      agree to this Assignment on the following terms and conditions:

     

    
      	
              1.

            	
              ASSIGNOR
                does hereby Farm-Out Seventy-Five Percent Net Revenue Interest (75%
                N.R.I.) In and to 2099 acres, comprised of nine (9) separate mineral
                leases, to ASSIGNEE. The farm-out interest is hereby granted as One
                Hundred Percent Working Interest (100% W.I.); thereby ASSIGNEE will
                pay
                100% of the drilling, completion, and operation costs to earn their
                75%
                NRI.

            


    

    


    
      	
              2.

            	
              The
                purchase price for the subject leaseholds shall be delivered to ASSIGNOR’S
                Bank Account of choice via wire-transfer
                (EFT).

            


    

    


    
      	
              3.

            	
              ASSIGNEE
                shall drill to the New Albany Shale or acquire an extension of the
                Walker
                Lease and the Lakefield/Taylor Lease before the expiration of the
                current
                leases.

            


    

    


    
      	
              4.

            	
              ASSIGNEE
                must continue drilling to retain their Farmed-In rights. They must
                drill a
                minimum of twelve (12) New Albany Shale wells per year, until all
                locations have been developed on the available acreage, to maintain
                their
                rights.

            


    

    


    
      	
              5.

            	
              Should
                commercially producible quantities of oil and/or gas be encountered
                in any
                formation other than the New Albany Shale, then ASSIGNEE shall have
                first
                right to drill a twin well to produce said hydrocarbons. Should ASSIGNEE
                decline to drill such a twin well, and should ASSIGNOR wish to drill
                that
                twin well to zones other than the New Albany Shale, then ASSIGNOR
                may do
                so at their own discretion and
                expense.

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    
      	
              6.

            	
              ASSIGNEE
                will have the option to contract ASSIGNOR for management of drilling
                and
                completion operations, and shall receive $10,000.00 per well for
                this
                service, due at the commencement of drilling
                activities.

            


    

    


    
      	
              7.

            	
              ASSIGNOR
                shall have the right to sell gas from any of its pre-existing gas
                wells on
                the project acreage, including the new Slinker #1 well, into the
                natural
                gas gathering line network that ASSIGNEE will construct without being
                assessed any fees, including but not limited to transportation,
                compression, or scrubbing of said gas. This right shall also extend
                to any
                twin gas wells that ASSIGNOR may drill at its own expense per Item
                4.

            


    

    


    
      	
              8.

            	
              ASSIGNEE
                shall maintain General Liability Insurance at all times during the
                project, and shall name as Additionally Insured: ASSIGNOR and its
                successors and assigns in these leases, as well as Mr. Danny Thomasson
                and
                Mr. Marvin K. Conn as individuals. The General Liability Insurance
                policy
                shall provide the following minimum coverage limits: General Aggregate
                $2
                Million; General Liability $1 Million; Products and Completed Operations
                $1 Million; Environmental Spills & Cleanup $1 Million; and Medical
                Payments $10,000.

            


    

    


    
      	
              9.

            	
              ASSIGNEE
                shall be responsible for all legal work associated with obtaining
                a Title
                Opinion for the subject leaseholds.

            


    

    


    
      	
              10.

            	
              ASSIGNEE
                shall assume responsibility for all land and crop damages arising
                from
                drilling or production activities such as road & location
                construction, spills, etc.

            


    

    


    
      	
              11.

            	
              ASSIGNEE
                shall assume responsibility for the maintenance of the leasehold
                property
                and infrastructure including roads, gates, etc.; insofar as said
                maintenance shall extend only to that leasehold infrastructure that
                will
                be utilized or created as a result of this agreement. This clause
                shall
                take affect on the date of closing of this agreement and the leasehold
                infrastructure, with all pre-existing structures and improvements
                shall be
                transferred “as-is” on that day.

            


    

    


    NOW,
      THEREFORE, for and in consideration of the above terms and conditions, and
      one
      dollar ($1.00) plus other good and valuable considerations, the receipt and
      sufficiency of which are acknowledged, the ASSIGNOR does hereby bargain,
      transfer and assign to ASSIGNEE the following described Oil and Gas
      Leases:


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    
      	
              Lease
                Name

            	
              County

            	
              Lease
                Book/Page

            	
              Date

            	
              Acreage

            
	 	 	 	 	 
	
              Lakefield/Taylor

            	
              Muhlenberg

            	
              94/83
                & 94/452

            	
              3/21/07

            	
              130

            
	
              Freda/Jeff
                Johnston

            	
              Christian

            	
              43/340

            	
              10/20/06

            	
              323

            
	
              Freda/Jeff
                Johnston

            	
              Christian

            	
              43/347

            	
              10/20/06

            	
              326

            
	
              Milda
                Walker (William Walker)

            	
              Todd

            	
              22/672

            	
              4/25/07

            	
              184

            
	
              Michael
                Slinker

            	
              Muhlenberg

            	
              94/332
                (Lease)

            	 	 
	 	 	
              94/537
                (Extension)

            	
              6/30/06

            	
              187

            
	
              Billy
                Johnston

            	
              Christian

            	
              43/137

            	
              7/1/2004

            	
              130

            
	
              Billy
                Johnston

            	
              Todd

            	
              22/430

            	
              7/1/2004

            	 
	
              Golden
                Eagle/Walter

            	
              Todd

            	
              22/258
                & 22/318

            	
              4/16/2001

            	
              80

            
	
              Francis/Grace

            	
              Christian

            	
              41/263

            	
              10/21/92

            	
              200

            
	
              Hunter/Wells

            	
              Christian

            	
              41/23
                & 41/19 &

            	 	 
	 	 	
              41/19

            	 	
              543

            


    

    


    TO
      HAVE
      AND TO HOLD unto ASSIGNEE, its successors and assigns, a 75% Net Revenue
      Interest as the 100% Working Interest in above described leases, subject to
      all
      the aforesaid terms and conditions, as well as all terms and conditions in
      the
      original leases with only such Warranty of title as ASSIGNOR actually
      possesses.

     

    ASSIGNOR
      does warrant that there are no undisclosed material defects in the above leases
      of which ASSIGNOR is aware and the ASSIGNOR has taken no action or made no
      omissions in actions that would render any of the above leases invalid or of
      no
      effect. 

     

    WITNESS
      the signatures of the parties hereto on this the 4th day of October,
      2007.

    


    
      	K
              & D ENERGY	 
	 	 	 
	
              BY:

            	 	 
	 	
              DANNY
                THOMASSON, Partner

            	 
	 	 	 
	
              BY:

            	 	 
	 	
              KEITH
                CONN, Partner

            	 
	ASSIGNOR	 
	 	 	 
	 	 	 
	KY
              USA ENERGY, INC.	 
	 	 	 
	
              BY:

            	 	 
	 	
              STEVE
                EVERSOLE

            	 
	ASSIGNEE	 


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    COMMONWEALTH
      OF KENTUCKY

    


    COUNTY
      OF____________________

    


    SIGNED
      AND ACKNOWLEDGED to before me by K & D ENERGY, by and through its partner,
      DANNY THOMASSON, who personally appeared before me and known to me or
      satisfactorily identified by me, to be his free act and deed, on this the _____
      day of October, 2007.

     

    
      	
               

            	 
	
              NOTARY PUBLIC

            	 	 
	
              My Commission Expires:

            	 	 


    

    


    COMMONWEALTH
      OF KENTUCKY

    


    COUNTY
      OF
      ______________

    


    SIGNED
      AND ACKNOWLEDGED to before me by K & D ENERGY, by and through its partner,
      KEITH CONN, who personally appeared before me and known to me or satisfactorily
      identified by me, to be his free act and deed, on this the _______ day of
      October, 2007.

    
       

      
        	
                 

              	 
	
                NOTARY PUBLIC

              	 	 
	
                My Commission Expires:

              	 	 


      

       

    

    COMMONWEALTH
      OF KENTUCKY

    


    COUNTY
      OF
      ______________

    


    SIGNED
      AND ACKNOWLEDGED to before me by KY USA ENERGY, INC. by and through STEVE
      EVERSOLE, who personally appeared before me or satisfactorily identified by
      me,
      to be his free act and deed, on this the ____ day of October, 2007.

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                 

              	 
	
                NOTARY PUBLIC

              	 	 
	
                My Commission Expires:

              	 	 


      

       

    

    THIS
      INSTRUMENT PREPARED BY:

    


    BASIL
      LAW
      FIRM

    231
      West
      Main Street

    Glasgow,
      Kentucky 42141

    TELEPHONE:
      270-651-9822

    FAX:
      270-651-8026

    


    BY:_________________________________

    DANNY
      J.
      BASIL

    


    My
      Documents,GG; Contracts; Farm-Out Assignment, K & D Energy